Land and housing supply key to affordability

While land and housing values have taken quite a hit across Western Australia in recent years, housing affordability remains a critical issue across the state and indeed across the country.

Supply is currently outstripping demand in Perth, which has put downward pressure on prices. In fact, Perth is now considered one of the cheapest capital cities in Australia, with an average price of new land sitting at $230,825.

However, as the broader economic outlook improves, demand for new land and housing is expected to increase steadily in the next 12 to 18 months. This is likely to put upward pressure on prices once again.

While we do want to see positive growth in our property market, what we want to avoid as the market recovers is a similar situation to the previous mining boom, when demand for property far outstripped supply and developers were unable to keep up.

This situation led to rapid price escalation and many people being priced out of the market, particularly those on lower incomes.

We must not rest on our laurels now that the market is quiet. All levels of government and private industry need to plan for the next growth phase to ensure we will have sufficient supply to satisfy an increase in demand.

That means ensuring there is adequate land in places where people want to live that is appropriately zoned for residential use and the necessary infrastructure is planned and funded accordingly.

To make sure this happens, it is critical the findings from the recent State Government planning reform green paper are implemented effectively so new land is not held up by a convoluted system where delays, uncertainty and duplications currently mean time frames are often blown out and the price of land and housing to the end consumer gets pushed up.

UDIA is also looking forward to the imminent establishment of Infrastructure WA, an independent body that will work on strategic planning for our state’s infrastructure needs and provide advice to government on infrastructure requirements and financing models.

A cross government approach to urban development, where all stakeholders are working toward a common goal, would ensure developers can meet the community’s needs and expectations for housing in an affordable and efficient way.

This is the perfect time, while we are at the bottom of this market cycle, to take the time to prepare for the inevitable market upturn.